Penalty cannot be imposed under Rules 26 of Central Excise Rules, 2002 on employee of Company

Hubergroup India Pvt Ltd Vs C.C.E. & S.T.-Daman (CESTAT Ahmedabad)

As regard, penalty imposed on Shri. Suresh Nair employee of the appellant’s Company. I find that the issue of correct calculation of Cenvat Credit on the invoice issued by the 100% EOU was always in dispute, therefore, mala fide cannot be attributed to the employee of the Company in the facts of the present case. Moreover, he is not beneficiary of any wrong doing by the Company. Accordingly, considering the peculiar facts of the present case , I find that the penalty Shri. Suresh Nair employee of the Company cannot be imposed under Rules 26 of the Central Excise Rules, 2002. Hence, penalty on Shri. Suresh Nair is not sustainable , accordingly, set aside.

FULL TEXT OF THE CESTAT AHMEDABAD ORDER

This appeal is directed against the de novo order dated 29.10.2020 passed by the Commissioner, Central GST & Central Excise, Daman Commissioner ate whereby the learned Commissioner denied the Cenvat Credit in respect of Education Cess and Secondary & Higher Education Cess under the invoice issued by the 100% EOU.

2. Shri. S. Suriyanarayanan, learned Counsel appearing on behalf of the appellant submits that the appellant had already reversed the Cenvat Credit of Education Cess prior to show cause notice, thereafter, the same was also  excluded while calculating the demand of Cenvat credit, hence, the Education Cess and Secondary & Higher Education Cess was not the subject matter of the show cause notice, accordingly, the impugned order denying the Cenvat credit on Education Cess and Secondary & Higher Education Cess is beyond the scope of show cause notice, hence, the same is not sustainable. He further submits that there is substantial unutilized balance of Cenvat credit in respect of Education Cess in the Cenvat account of the appellant at the time of switching over to GST regime , hence, the credit balance was lapsed, for this reason also demand is not sustainable.

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